The key to starting and growing a new venture is the ability of the Founders to “co-create” a new venture and let other stakeholders (i.e. customers, partners, suppliers, and investors) shape the new venture. This is where a distinction between “expert” entrepreneurs and “experienced” entrepreneurs becomes crucial. “Experienced” entrepreneurs have had experience starting one or more new ventures. They may have achieved some success in their past ventures, but their chances of replicating their success is not higher than their first venture. In other words, the entrepreneurial process remains a mystery to them, and whether they will be successful in their next venture is highly dependent on chance and circumstance.
By contrast, “expert” entrepreneurs are individuals who are able to build many successful new ventures over their lifetime. They have learned, through repeated experiences of starting many ventures, both successes and failures, about what matters most in the process of creating new ventures and why. The entrepreneurial process is less of a mystery, and they have been through the process with so many different people that they have developed and validated some heuristics, or rules of thumb, which can serve them well in the process of starting any new venture, regardless of industry or cultural context.
What distinguishes “expert” entrepreneurs from simply “experienced” entrepreneurs is that ability to react without bias to any new entrepreneurial challenge in a way that will produce the optimal results for the formation and success of a new venture. This requires humility and a willingness to recognize objective metrics over subjective opinions formed through personal experiences. This is not an easy thing to do, especially for an entrepreneur who has had a successful venture and is seen as a celebrity on the entrepreneurship scene.
Steve Jobs provides a great example of this. After being ousted from Apple in the 1980s, Jobs used his massive fortune to get into two new ventures. The first was NEXT, Jobs’s attempt to revolutionize business computing by applying the same product philosophy as he had used for the original Mac to the educational computer market. This was a great idea, but the company nearly went bankrupt for the same reasons that hampered the success of the original Mac (i.e. too high a price point, or as some might say, a lack of product/market fit). NEXT was saved when Jobs rejoined Apple, which subsequently acquired NEXT for the use of its software kernel in the development of the next generation Mac OS.
He also purchased Industrial Light and Magic from George Lucas, and intended to revolutionize the digital animation industry by providing cutting-edge software and hardware. The company almost went bankrupt (again, due to a lack of product/market fit), and was only saved when it started producing animated films, like Toy Story, that hit home runs at the box office.
Steve Jobs himself could not have envisioned either of those outcomes, and if he refused to bend his vision to accommodate what customers were telling him (through not purchasing the intended products, and purchasing the unintended ones), we wouldn’t have incredible products like the iPhone, iPod, and iPad, and Apple wouldn’t be the most valuable technology company today.
This principle of co-creation has emerged from research conducted by Dr. Saras Sarasvathy, who met and interviewed “expert” entrepreneurs to understand the way they think and make decisions during the process of starting a new venture.
The concept is that subtle balance between vision and adaptability that is a hallmark of “expert” entrepreneurs and great leaders in general. At the core of co-creation is the ability of the entrepreneur or leader to gain the trust or commitment of key stakeholders (i.e. a purchase order for 50 new computers from a computer retailer, or a contract to develop a new Operating System for a new personal computer).
So, the practice of co-creation through any type of “pre-founding” experience is the best way for both aspiring and experienced entrepreneurs to improve their chances of new venture success. Organized programs like Startup Weekend and Lean Startup Machine offer great opportunities for aspiring entrepreneurs to gain such pre-founding experiences, as well as entrepreneurship courses that focus the students on learning through interactions with customers, partners, etc, as opposed to simply focusing on writing an unvalidated business plan. The quality of these experiences will depend on the clarity and focus of the individual entrepreneurs and how they spend their time. At the end, what matters most is not whether their new venture idea was successful or not, but rather, what tangible skills, knowledge, and connections they gained during the experience that can help them in future entrepreneurial endeavors.
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